The former chancellor on the banking crisis, facial hair, and why the plan for Greece puts him in mind of Versailles

Your memoir, Back from the Brink, was praised for its measured tone. Were you not tempted to stab a few backs?

Oh no. I wanted to write a straightforward account of my 1,000 days (almost) in Number 11 – how I saw it, what happened. I do think there’s a market for that sort of straightforward account. It’s been received OK so far.

I notice you’ve got Tony Blair’s memoir, A Journey, on your bookshelf

I reviewed it for the Guardian, so that’s why I got it. I’m afraid I was kind of mercenary about it – I said “If you want me to review it, then you need to send me a free copy.” It’s a good book, I enjoyed it. It’s readable, which is an accusation you can’t level at every political biography.

As chancellor, you had to deal with some knuckle-biting moments, most notably when it looked like RBS would go under in 2008. How do you cope with that level of stress?

I think if you’d come completely cold to it, you’d deal with it very badly. The fact was we knew RBS and most of the other banks were in trouble. We had a plan which was almost ready. But when I was asked to speak to Tom McKillop, who was chairman of the bank, and I said “How long can you last?” I assumed it would be two or three days. He said two or three hours and that was the only time I think in the entire banking crisis that I did feel a sudden chill – probably the closest I ever came to thinking: “This is the end.” And if the package we announced the next morning hadn’t worked, it would have been the end.

Did you sleep that night?

Oh yes, I sleep well. I didn’t get home till about two in the morning because I had to go to the Treasury, but I’ve learned from long experience with negotiations that people hang around as long as you’re hanging around, so I said I was going to bed at one o’clock and that concentrated minds.

You’ve described the decision to strip Fred Goodwin of his knighthood as tawdry. Why?

Because we pride ourselves on being a civilised country where the rule of law prevails and there is due process. We rightly condemn those countries where that doesn’t happen. Now, I’m not carrying a flag for Fred Goodwin – he’s the author of his own misfortunes – but the rules are quite clear: you’ve got to be convicted of an offence or censured or disciplined by your professional body to be stripped of your knighthood. No matter what you think of Fred Goodwin, none of these things had happened.

Once you start on this business, what about the other knights? There were quite a lot of them involved in both RBS and HBOS. And then you go into broader questions: there are a number of members of the House of Lords who have done time and are able to vote on the issues of the day.

During your time as transport secretary, you were voted Britain’s most boring politician two years in a row by Truckers’ Weekly. Did you mind?

You know, if you want to be popular you shouldn’t be in politics. I think, when you’re secretary of state for transport, being boring is actually a bit of a compliment. Transport’s only interesting when it’s going wrong.

Have you ever been annoyed by headline-writers punning on your name?

No. When you’re a child with a name like mine you’re open to people making fun of you, but by the time you’re seven or eight, you’re over that.Do you ever call your wife darling?

How my wife and I describe each other remains private.

You’re on record as being pro-Union. Do you feel more Scottish than British?

I feel equally Scottish and British, I don’t see any conflict between them. I’m proud of both and I don’t see you should be forced to choose between the two.

Haggis or fish and chips?

Haggis. If only because fish and chips are not good for me.

Haggis isn’t that healthy either

Well, it’s got oatmeal in it…

Do you have any advice for the eurozone?

Frankly, I don’t think any policy that ends up with Greece having more debt at the end of eight years than it had when it went into it is going to work, given the fragile nature of the Greek economy. You’re reminded of the Treaty of Versailles in 1920, where basically a solution is posed that is never going to work and will end in tears. That’s one of the things that the people who run the eurozone at the moment are rather overlooking.

Is Ed Miliband right to say you should move on from New Labour?

I think the point he would make is that New Labour was a brand of its time and I agree that you have to be in tune with the times. There are two things I would say though. Firstly, you do not under any circumstances give up the centre ground of British politics, which is where New Labour was anchored – if you lose that, then you’re not going to win – and I think Ed knows that very well. I think the other thing is that, whatever else we do, we’ve got to have a realistic programme for the public. Our policies have to be seen to be relevant on the economy and on other things.

Is there a danger of losing the centre ground?

No I don’t think so. Everything I’ve heard Ed Miliband say tells me that he knows that. Sometimes I hear it from other people. The biggest cop out in my mind is if you end up in a situation where your appeal is so narrow you’re never in a position to do anything about the people that you want to serve.

Why did you shave off your beard?

Because I got fed up with it. I would have taken it off before the 1997 election but, contrary to the myth that I was ordered to take it off, I’d had all my election photographs taken and I was damned if I was going to incur the costs of taking them all again. Then that summer we were staying in a farmhouse in France. When the family were out I shaved off the beard and awaited their return, which was an interesting experience. None of them had ever seen me without it. I remember my daughter, who was then about seven, ran off screaming.

It recently emerged that almost £400,000 of taxpayers’ money has been spent on hiring 12 fig trees for Portcullis House. Do you think that’s good value for money?

I personally don’t think they’re worth it because I’m not sure what they add, other than to make the atmosphere in there very clammy.